Collateral and Adverse Selection in Transition Countries

This paper tackles the question of knowing whether collateral helps solve adverse selection problems in transition countries. We use a unique dataset of about 400 bank loans from 16 transition countries. Our findings support the view of a positive link between the presence of collateral and the risk premium, which is in accordance with the observed-risk hypothesis. This suggests that collateral does not mitigate adverse selection problems in transition countries.

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Year of publication:	2008
Authors:	Weill, Laurent ; Godlewski, Christophe J.
Institutions:	Laboratoire de Recherche en Gestion (LaRGE), Institut de Finance de Strasbourg
Subject:	Bank \| collateral \| transition economies

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Extent:	application/pdf
Series:	Working Papers of LaRGE Research Center.
Type of publication:	Book / Working Paper
Language:	English
Classification:	G21 - Banks; Other Depository Institutions; Mortgages ; P20 - Socialist Systems and Transitional Economies. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005811640